Approximately six in 10 Swedish and Dutch investors are comfortable with high or moderate risk. Consequently, they clearly prefer growth investing over income investing. Investors from both countries have more than three quarters of their money invested in growth assets. This is significantly more than for all other European countries. They are also more often invested in mutual funds.
JP Morgan AM also quizzed the respondents about their knowledge about income investing. Perhaps unsurprisingly, considering their relatively low interest in the concept, Swedish investors scored lowest. Only 10% could come up with a correct definition of income investing, according to the asset manager. On average, half of European investors turned out to be familiar with the concept, with the French and the Swiss scoring the highest marks.
Risk-averse Italians
Italian investors are at the other end of the risk-taking scale, with less than a third of them tolerating high or moderate risk-levels. As a result, they have the majority of their assets invested in income-generating assets, and are much more likely to be invested in individual bonds than investors from other countries. Still, despite their general risk-aversion, about a third of Italian income-investors is invested in emerging market funds, a relatively volatile asset class.
A Viking mindset
Of those investors who invest in income-generating mutual funds, the Swedes are most inclined to roam the world for income. Not only is their home bias less pronounced compared to the European average, about four in 10 of them have income-related exposure to more risky regions such as Asia-Pacific and wider emerging markets. This is about double the European average.
While the majority of European investors are invested in actively managed mutual funds, with the exception of Switzerland and the UK, ETFs are only used by some 13% of them. Only in France, more than 20% of investors are invested in index-linked products. In the Netherlands, the UK, Spain and Sweden, on the other hand, less than one in 10 investors own ETFs.
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*Respondents came from the following countries: Belgium, France, Germany, Italy, Spain, the Netherlands, Sweden, Switzerland and the UK.
